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CST: 17/06/2018 22:22:57   

I.D. Systems Reports Fourth Quarter and Full Year 2017 Results

108 Days ago

Quarterly Revenue Up 21% to $11.2 Million; Annual Revenue Up 11% to $41.0 Million

WOODCLIFF LAKE, N.J., March 01, 2018 (GLOBE NEWSWIRE) -- I.D. Systems, Inc. (NASDAQ:IDSY), a leading provider of enterprise asset management technology, reported results for the fourth quarter and full year ended December 31, 2017. 

Management Commentary
“The fourth quarter represented a continuation of strong growth and operational momentum achieved over the last several quarters,” said I.D. Systems CEO Chris Wolfe. “More specifically, we achieved our third consecutive quarter of topline growth, improved profitability, as well as operating cash flow generation, which improved to $3.9 million in 2017. In fact, the company has been profitable on a non-GAAP earnings basis for the last three quarters.

“Operationally, we strengthened our core business and diversified our offerings in the market. In our Industrial Truck division, we saw growth in OEM and independent dealer channel sales, in addition to expanding business with strategic enterprise accounts. Also, we completed system development and production readiness of our solution with Avis Budget Group. We are working to deploy the first 50,000 systems this year, which is in line with the initial phase of their stated plan to have a fully connected fleet by 2020.

“Integration of Keytroller, which we acquired in August 2017 and is now part of our Industrial Truck division, is progressing ahead of plan, having already produced meaningful sales and product synergies. Our combined product strategy includes a new product being introduced this summer that is specifically designed for the mid- to smaller-site market. This new product’s features, pricing and ease of implementation will gain access to a new untapped market of more than five million industrial trucks worldwide. Our significant operational progress in 2017, combined with our strong balance sheet of $16.9 million in cash and investments and no debt, has established a solid foundation for us to leverage going forward.”

Fourth Quarter 2017 Financial Results
Revenue increased 21% to $11.2 million from $9.2 million in same year-ago period. The increase was primarily due to higher Rental Fleet revenue and Industrial Truck revenue.

Recurring revenue increased by 2% to $4.5 million from $4.4 million in the same period a year ago.

Gross margin increased to 50.2% from 47.4% in the same period a year ago.

Selling, general and administrative expenses were $5.9 million, compared to $5.3 million in the same year-ago period. The increase was due to the inclusion of expenses from Keytroller in the fourth quarter of 2017, which were absent in the same period a year ago.

Research and development expenses were $0.9 million, compared to $1.1 million in the same year-ago quarter.

Excluding stock-based compensation, depreciation and amortization, foreign currency translation losses, and acquisition-related expenses, non-GAAP net income totaled $200,000 or $0.01 per basic and diluted share, an improvement from non-GAAP net loss of $832,000 or $(0.06) per basic and diluted share in the same year-ago quarter.

Net loss totaled $874,000 or $(0.05) per basic and diluted share, an improvement from a net loss of $2.1 million or $(0.16) per basic and diluted share in the same year-ago quarter. 

At quarter-end, the company had $16.9 million in cash, cash equivalents and marketable securities, compared with net cash of $3.9 million in the same year-ago quarter.

Full Year 2017 Financial Results
Revenue increased 11% to $41.0 million in 2017 compared to $36.8 million in the same year-ago period. The increase was primarily due to higher Rental Fleet revenue and Industrial Truck revenue.

Recurring revenue increased 4% to $18.8 million from $18.0 million in the same period a year ago.

Gross margin improved to 51.1% from 49.7% in the prior year.

Selling, general and administrative expenses increased 5% to $21.1 million in 2017 from $20.1 million in 2016, principally driven by higher expenses related to the Keytroller acquisition.

Research and development expenses decreased 13% to $4.0 million in 2017 from $4.5 million in same year-ago period.

Excluding stock-based compensation, depreciation and amortization, foreign currency translation losses, and non-recurring items, non-GAAP net loss totaled $356,000 or $(0.02) per basic and diluted share, an improvement from a non-GAAP net loss of $2.9 million or $(0.22) per basic and diluted share in the same year-ago period.

Net loss totaled $3.9 million or $(0.26) per basic and diluted share, an improvement from a net loss of $6.4 million or $(0.49) per basic and diluted share in the same year-ago period. 

Net cash provided by operations was $3.9 million, an improvement from net cash used in operations of $2.5 million in 2016.

Investor Conference Call
I.D. Systems management will discuss the results of the company’s operations and business outlook on a conference call today (Thursday, March 1, 2018) at 4:45 p.m. Eastern time (1:45 p.m. Pacific time).

Company CEO Chris Wolfe and CFO Ned Mavrommatis will host the call, followed by a question and answer session where financial analysts and major institutional shareholders can ask questions.

U.S. dial-in: (877) 307-1379
International dial-in: (443) 877-4066
Conference ID: 1686315

The conference call will be broadcast simultaneously and available for replay in the investor section of the company’s website at www.id-systems.com.

If you have any difficulty connecting with the conference call, please contact I.D. Systems’ investor relations team at (949) 574-3860.

Non-GAAP Measures
To supplement its financial statements presented in accordance with Generally Accepted Accounting Principles (GAAP), I.D. Systems provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP net income/loss and non-GAAP net income/loss per basic and diluted share. Reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, or superior to, GAAP results. These non-GAAP measures are provided to enhance investors’ overall understanding of I.D. Systems’ current financial performance. Specifically, I.D. Systems believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results and business outlook. Because I.D. Systems’ method for calculating the non-GAAP measures may differ from other companies’ methods, the non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliation of all non-GAAP measures included in this press release to the nearest GAAP measures can be found in the financial tables included in this press release.

About I.D. Systems
Headquartered in Woodcliff Lake, New Jersey, with subsidiaries in Texas, Florida, Germany, and the United Kingdom, I.D. Systems is a leading global provider of wireless M2M solutions for securing, controlling, tracking, and managing high-value enterprise assets, including rental cars, industrial vehicles, trailers, containers, and cargo.  The Company’s patented technologies address the needs of organizations to monitor and analyze their assets to increase efficiency and productivity, reduce costs, and improve profitability. For more information, please visit www.id-systems.com.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward looking statements within the meaning of federal securities laws. Forward-looking statements include statements with respect to I.D. Systems’ beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond I.D. Systems’ control, and which may cause its actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. For example, forward-looking statements include statements regarding: prospects for additional customers; potential contract values; market forecasts; projections of earnings, revenues, synergies, accretion or other financial information; emerging new products; and plans, strategies and objectives of management for future operations, including growing revenue, controlling operating costs, increasing production volumes, and expanding business with core customers. The risks and uncertainties referred to above include, but are not limited to, future economic and business conditions, the loss of key customers or reduction in the purchase of products by any such customers, the failure of the market for I.D. Systems’ products to continue to develop, the possibility that I.D. Systems may not be able to integrate successfully the business, operations and employees of acquired businesses, the inability to protect I.D. Systems’ intellectual property, the inability to manage growth, the effects of competition from a variety of local, regional, national and other providers of wireless solutions, and other risks detailed from time to time in I.D. Systems’ filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2016. These risks could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, I.D. Systems. Unless otherwise required by applicable law, I.D. Systems assumes no obligation to update the information contained in this press release, and expressly disclaims any obligation to do so, whether as a result of new information, future events or otherwise.

I.D. Systems Contact
Ned Mavrommatis, CFO
ned@id-systems.com
(201) 996-9000

Investor Contact
Matt Glover     
Liolios Group, Inc.                                                                                                                           
IDSY@liolios.com                                                                                                           
(949) 574-3860


I.D. Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations Data
    Three Months Ended
December 31,
      Year Ended
December 31,
 
    2016       2017       2016       2017  
    (Unaudited)       (Unaudited)               (Unaudited)  
Revenue:                                      
Products   $ 5,605,000       $ 6,353,000       $ 21,366,000       $ 23,552,000  
Services     3,621,000         4,814,000         15,456,000         17,406,000  
                                       
      9,226,000         11,167,000         36,822,000         40,958,000  
Cost of revenue:                                      
Cost of products     3,690,000         3,736,000         14,036,000         13,453,000  
Cost of services     1,167,000         1,822,000         4,492,000         6,578,000  
                                       
      4,857,000         5,558,000         18,528,000         20,031,000  
                                       
Gross profit     4,369,000         5,609,000         18,294,000         20,927,000  
                                       
Operating expenses:                                      
Selling, general and administrative expenses     5,337,000         5,869,000         20,126,000         21,053,000  
Research and development expenses     1,116,000         915,000         4,536,000         3,965,000  
                                       
      6,453,000         6,784,000         24,662,000         25,018,000  
                                       
Loss from operations     (2,084,000 )       (1,175,000 )       (6,368,000 )       (4,091,000 )
Interest income     67,000         84,000         285,000         253,000  
Interest expense     (71,000 )       (94,000 )       (293,000 )       (342,000 )
Other income     5,000         -         6,000         (1,000
                                       
Net loss before income taxes     (2,083,000 )       (1,185,000 )       (6,370,000 )       (4,181,000 )
                                       
Income tax benefit – sale of NJ R&D tax credits     -         311,000         -         311,000  
                                       
Net loss   $ (2,083,000 )     $ (874,000 )     $ (6,370,000 )     $ (3,870,000 )
                                       
Net loss per share - basic and diluted   $ (0.16 )     $ (0.05 )     $ (0.49 )     $ (0.26 )
                                       
Weighted average common shares outstanding - basic and diluted     13,097,000         16,890,000         12,984,000         14,961,000  


 
I.D. Systems, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
    Three Months Ended
December 31,
    Year Ended
December 31,
 
    2016     2017     2016     2017  
                         
Net loss attributable to common stockholders   $ (2,083,000 )   $ (874,000 )   $ (6,370,000 )   $ (3,870,000 )
Depreciation and amortization     163,000       390,000       685,000       1,132,000  
Stock-based compensation     159,000       584,000       1,658,000       2,437,000  
Foreign currency translation losses     273,000       (50,000     437,000       (456,000
Severance expenses     656,000       -       691,000       -  
                                 
Acquisition related fees     -       150,000       -       401,000  
                                 
Non-GAAP (loss) income   $ (832,000 )   $ 200,000     $ (2,899,000 )   $ (356,000 )
                                 
Non-GAAP net (loss) income per share - basic and diluted   $ (0.06 )   $ 0.01     $ (0.22 )   $ (0.02 )


 
I.D. Systems, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet Data
    As of December 31,
    2016   2017
              (Unaudited)  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 4,972,000     $ 5,097,000  
Restricted cash     305,000       306,000  
Investments - short term     115,000       1,201,000  
Accounts receivable, net     9,585,000       8,746,000  
Financing receivables - current, net     1,766,000       1,295,000  
Inventory, net     3,920,000       4,586,000  
Deferred costs - current     3,750,000       4,296,000  
Prepaid expenses and other current assets     3,495,000       3,627,000  
Total current assets     27,908,000       29,154,000  
                 
Investments - long term     1,499,000       10,278,000  
Financing receivables - less current portion     2,430,000       1,557,000  
Deferred costs - less current portion     6,638,000       4,302,000  
Fixed assets, net     3,075,000       2,747,000  
Goodwill     1,837,000       7,318,000  
Intangible assets, net     706,000       5,417,000  
Other assets     153,000       159,000  
    $ 44,246,000     $ 60,932,000  
                 
LIABILITIES                
Current liabilities:                
Short-term borrowings   $ 2,993,000     $ -  
Accounts payable and accrued expenses     7,622,000       7,440,000  
Deferred revenue - current     7,197,000       9,711,000  
Acquisition related contingent consideration - current     -       1,923,000  
                 
Total current liabilities     17,812,000       19,074,000  
                 
Deferred revenue - less current portion     10,066,000       7,738,000  
Acquisition related contingent consideration - less current portion     -       854,000  
Deferred rent     366,000       295,000  
                 
      28,244,000       27,961,000  
                 
STOCKHOLDERS’ EQUITY                
Preferred stock     -       -  
Common stock     129,000       183,000  
Additional paid-in capital     111,844,000       133,569,000  
                 
Accumulated deficit     (91,498,000 )     (95,368,000
Accumulated other comprehensive loss     (103,000 )     (578,000
Treasury stock     (4,370,000 )     (4,835,000 )
                 
Total stockholders’ equity     16,002,000       32,971,000  
Total liabilities and stockholders’ equity   $ 44,246,000     $ 60,932,000  


 
I.D. Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flow Data
      Year Ended December 31,
      2016   2017
          (Unaudited)
Cash flows from operating activities:                  
Net loss     $ (6,370,000 )   $ (3,870,000 )
Adjustments to reconcile net loss to cash provided by (used in) operating activities:                  
Inventory reserve       205,000       313,000  
Stock based compensation expense       1,658,000       2,437,000  
Depreciation and amortization       685,000       1,132,000  
Bad debt expense       117,000       115,000  
Contingent consideration       -       94,000  
Other non-cash items       2,000       (69,000
Changes in:                  
  Restricted cash       (1,000 )     (1,000 )
  Accounts receivable       1,174,000       1,597,000  
  Financing receivables       832,000       1,344,000  
  Inventory       3,027,000       87,000  
  Prepaid expenses and other assets       (1,120,000 )     (138,000 )
  Deferred costs       (3,758,000 )     1,790,000  
  Deferred revenue       2,939,000       186,000  
  Accounts payable and accrued expenses       (1,874,000 )     (1,099,000 )
                   
Net cash (used in) provided by operating activities       (2,484,000 )     3,918,000  
                   
Cash flows from investing activities:                  
Acquisition       -       (7,373,000 )
Capital expenditures       (505,000 )     (386,000 )
Purchases of investments       (956,000 )     (11,083,000 )
Proceeds from the sale and maturities of investments       932,000       1,113,000  
                   
Net cash used in investing activities       (529,000 )     (17,729,000 )
                   
Cash flows from financing activities:                  
Proceeds from underwritten public offering               16,065,000  
Borrowings under revolving credit facility       14,650,000       11,655,000  
Repayments under revolving credit facility       (11,657,000 )     (14,648,000 )
Proceeds from exercise of stock options       70,000       1,277,000  
Principal payments of capital lease obligation       -       -  
                   
Net cash provided by financing activities       3,063,000       14,349,000  
                   
Effect of foreign exchange rate changes on cash and cash equivalents       433,000       (413,000
Net increase in cash and cash equivalents       483,000       125,000  
Cash and cash equivalents - beginning of period       4,489,000       4,972,000  
                   
Cash and cash equivalents - end of period     $ 4,972,000     $ 5,097,000